In another example of machines rising up to destroy their human masters, a collision with an underwater robot knocked out the cap BP has siphoning oil from the leaking well in the Gulf. In other news, the US finds itself alone in urging spending rather than austerity at the G20 summit, five states are getting federal money for programs to help homeowners pay their mortgages, and Fannie Mae is taking action to punish homeowners who fail. But all that will be overshadowed because today is the final day of financial regulation's conference negotiations. Wait, I got that wrong. All that will be overshadowed because today is the day the iPhone 4 goes on sale.

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The leaking BP oil well is gushing oil into the Gulf again following a robot mishap, reports Susan Daker: "An underwater robot collided with a cap placed atop the leaking deepwater well on Wednesday morning, forcing the company to halt the operation of the Discoverer Enterprise, the larger of two vessels currently capturing oil in the Gulf of Mexico. The cap connects with the vessel via a mile-long pipe, helping siphon up to 18,000 barrels of crude a day. If the cap isn't replaced quickly, BP will be unable to stick to its plan of capturing 53,000 barrels a day by early next week, the U.S. Coast Guard said."

As the US urges stimulus spending, many other G20 nations are adopting austerity packages, reports Ian Swanson: "Germany, France and Great Britain have all launched austerity campaigns designed to reduce public debt. They’re motivated in part by the Greek debt crisis, which continues to scare countries across Europe."

Fannie Mae will not provide loans to borrowers for seven years if they default on a mortgage: http://bit.ly/aYBrV2

Five states are getting Treasury funds to help homeowners, reports Darrell Hughes: "State housing agencies in Arizona, California, Florida, Michigan and Nevada will receive a total of $1.5 billion from the Obama administration's 'Hardest Hit Fund.' 'These states have identified a number of innovative programs that will make a real difference in the lives of many homeowners facing foreclosure,' said Herbert Allison Jr., Treasury assistant secretary for financial stability."

But is it -- as many of the administration's housing programs have been -- too little, too late? http://bit.ly/9nugzL

Still to come: Liberals not getting their calls returned by the White House; the Fed confirms it will have low interest rates into 2011 and even 2012; Canada's "quaintly, old-school" mortgage industry; doctors will start working more manageable hours; and a tiny kitten wearing a tiny hat eats a tiny ice-cream cone.Energy

Ken Salazar is considering a limited version of the deepwater drilling moratorium a judge recently struck down, reports Siobhan Hughes: "He said certain types of activities could be allowed if the government determines they are safe. 'It might be that there are demarcations that can be made based on reservoirs where we actually do know the pressures and the risks associated with that versus those reservoirs that are exploratory in nature,' Mr. Salazar told the Senate Appropriations Committee. 'The moratorium order that we will issue will include the criteria under which it is appropriate to take a look at the lifting of the moratorium.'"

The House Judiciary Committee passed a bill allowing Transocean to be held liable for rig worker deaths: http://bit.ly/dAm6c4

Liberal Senators are urging Obama to push harder for climate legislation, report Darren Samuelsohn and Manu Raju: "At a closed-door meeting of the Senate Democratic Caucus earlier this month, some of those frustrations came to a boil. Several Democrats complained that the administration needed to do a better job of communicating the problems facing the Gulf Coast and the solutions that Congress could provide for them. Reid urged his members to tell the White House about their concerns - only to have several, including Sheldon Whitehouse of Rhode Island, complain that their phone calls were not being returned."

The House passed a law giving the commission investigating the oil spill subpoena power by a vote of 420 to Ron Paul: http://bit.ly/9ZxIsv

The Fed is cautious on the US' economic recovery prospects, and promises low rates through 2011/12, reports Jon Hilsenrath: "The Fed on Wednesday said the recovery from the deep recession is 'proceeding,' a departure from its April assessment that the recovery 'continued to strengthen.' Consumer spending is 'increasing but remains constrained,' the job market is improving 'gradually,' housing is 'depressed' and inflation-already low-has 'trended lower,' the central bank said."

German chancellor Angela Merkel is rebuffing the administration on stimulus spending: http://bit.ly/9tj7CL

Scott Brown's attempt to allow banks to invest in hedge and private equity funds is succeeding, reports Brian Beutler: "Brown for weeks has been seeking a carveout in the legislation--originally authored by Sens. Carl Levin (D-MI) and Jeff Merkley (D-OR)--that would allow banks to invest a portion of their profits in hedge and private equity funds. And as the 60th vote for financial reform, his demands carry a lot of weight.…Multiple sources tonight say that in all likelihood the hedge fund loophole (known as a 'de minimis exemption') will be included in the offer that the conference committee considers this week."

The US could look to Canada's "quaintly, old-school" mortgage industry as a model, reports Howard Schneider: "With U.S. home sales and prices still shaky, Fritz bought in a Canadian market that already has rebounded beyond pre-crisis levels. Without the key tax advantages available to U.S. home buyers, he amassed as much as possible for the down payment, and he expects to pay off his 15-year mortgage with the same bank that gave him the loan -- a rarity in the United States, where finance companies typically resell mortgages."

Neil Irwin reports on the European Central Bank's desperate effort to save the euro -- and the Union: http://bit.ly/av9XVp

Chuck Schumer is under pressure to kill his China currency bill, reports Ian Swanson: "The White House has pressed Sen. Charles Schumer (D-N.Y.) not to offer his China currency legislation as a floor amendment, where it would almost certainly be approved, according to two sources. White House Chief of Staff Rahm Emanuel is one of several figures in the administration to have contacted Schumer to pressure him to hold back."

The Business Roundtable is clarifying its complaints with the White House's economic policy, reports Lori Montgomery: "The final straw, said Roundtable president John Castellani, was the introduction of two pieces of legislation, now pending in Congress, that the group views as particularly bad for business. One, a provision of the administration's financial regulation overhaul, would make it easier for shareholders to nominate corporate board members. The other would raise taxes on multinational corporations."

Medical residency programs are cutting hours to reduce doctor fatigue, reports Shirley Wang: "Amid continued concern about errors by overworked medical residents, hospitals would be forced to curtail shifts and increase supervision of some doctors-in-training under proposed new guidelines for residency programs released Wednesday. The plan from the Accreditation Council for Graduate Medical Education, which certifies residency programs, goes well beyond previous efforts to limit work hours. Many patient advocates and physicians hailed it as a step in the right direction, but it would likely pose logistical and financial challenges for teaching hospitals."

A vote on the DISCLOSE Act could happen Thursday: http://bit.ly/cfBXIX

Peter Orszag's potential successors show administration divisions on deficit reduction, reports Jonathan Weisman: "Of the leading contenders to succeed Mr. Orszag, two have proven deficit-reduction credentials. Treasury adviser Gene Sperling was an adviser to President Bill Clinton, who focused on deficit reduction, and former Deputy White House Budget Director Rob Nabors has been the senior aide to Mr. Orszag. But a leading contender, former Clinton White House economist Laura Tyson, has been heralded more for her communications skills than her dexterity with a budget knife. Other names include Stan Collender, a budget expert at the public-affairs firm Qorvis, and John Berry, director of the U.S. Office of Personnel Management."

The GOP will seek to paint Elena Kagan as a "political operative": http://nyti.ms/d9w2Hy

GOP House members are threatening to withhold support for a war supplemental if it includes other funding, reports David Rogers: "Republican leaders warned Wednesday that their House members will withhold support by voting 'present' on the war funds if Democrats attempt to add new domestic spending, including $10 billion to help local school boards avert teacher layoffs in the fall."

David Broder argues a better campaign finance approach is possible: "Michael Malbin, executive director of the nonpartisan Campaign Finance Institute, argues for abandoning the regulatory response to the Supreme Court decision in favor of an empowerment strategy.…Malbin's model is the New York City system, with a 6-to-1 match for the first $175 of any contribution, making it worth $1,225 to the candidate. With that kind of payoff, he says, candidates would have every reason to go after small contributors -- and pay less attention to the fat cats."

GOP calls to cut Medicaid now put states and the poor in jeopardy, writes Derek Thompson: "Take New Jersey, where Gov. Chris Christie has proposed to cut $11 billion (that's 25%!) of the state budget for its fiscal year 2011, which begins in two weeks. The states are looking to the federal government to determine how much money they'll need to allocate toward Medicaid and education. If cut our new Medicaid crutch in half, the states' Medicaid burden grows and in a zero-sum budget, that means something else goes."

Word is that Harry Reid is likely to file cloture on financial regulation today, setting up a final vote as early as Wednesday. But no one is celebrating yet: There are still amendments left to be voted on, including a restoration of Glass-Steagall and the Volcker Rule. And what's going to happen in Conference Committee? Meanwhile, the opposition hasn't found its voice against Elena Kagan, but nor, it seems, have her supporters. The oil spill is still a disaster, but for the first time, we're making some headway against it.

BP said its main vessel capturing oil from the huge Gulf of Mexico spill shut down overnight due to a blocked vent, though it expected to restart later Saturday after a lightning storm passes.BP spokesman Robert Wine said the Discoverer Enterprise, a ship siphoning 15,000 to 18,000 barrels of oil per day directly from the containment cap atop the ruptured well, shut down at 8:23 pm Friday (0123 GMT Saturday) due to a blocked flame arrester.The device is intended to stop the crude from combusting by extinguishing the flame.

BP said its primary vessel capturing oil from the massive Gulf of Mexico spill shut down overnight due to a blocked vent, though restart was expected later Saturday after a lightning storm leaves the area.The Discoverer Enterprise, a ship siphoning 15,000 to 18,000 barrels of oil per day directly from the containment cap atop the ruptured well, shut down at 8:23 pm Friday (0123 GMT Saturday) due to a blocked flame arrester, BP spokesman Robert Wine told AFP.The device is intended to stop the crude from combusting by extinguishing the flame.

Coast Guard commandant Thad Allen says the BP oil cap's success is not certain yet; Republican members of Congress are pushing legislation that would halt the Justice Department's challenge to Arizona's immigration law; the market says California and Illinois are likelier to default than Portugal; job retraining doesn't appear to be working; and, in the day's most depressing sto

Bad weather scuppered hopes Wednesday that a third ship could be hooked up a system capturing leaking oil from the Gulf of Mexico spill, amid reports BP was seeking foreign financial support.Crews on Tuesday began hooking up the Helix Producer ship to a system that captures spilling crude deep below the sea surface and siphons it up to waiting containment vessels.Adding the Producer is expected to double the amount of oil the system can capture, to 53,000 barrels a day, but high waves and winds have hampered efforts to link the vessel up.

Engineers hoped Monday to make more headway in their bid to contain a massive oil spill in the Gulf of Mexico after energy giant BP announced it was now capturing about half of the oil gushing from its ruptured Gulf well.Amid the largest environmental disaster in US history, BP's chief executive Tony Hayward said a cap fitted on the leaking pipe a mile (1,600 meters) down on the sea bed appeared to be working."As we speak, the containment cap is producing around 10,000 barrels of oil a day to the surface," he told the BBC Sunday.